McDonald's Corporation: Case Study McDonald's Corporation is the largest fast-food operator in the World and was originally formed in 1955 after Ray Kroc pitched the idea of opening up several restaurants based on the original owned by Dick and Mac McDonald. McDonald's went public in 1965 and introduced its flagship product, the Big Mac, in 1968. Today, McDonald's operates more than 30,000 restaurants in over 100 countries and have one of the world's most widely known brand names. McDonald's sales hit $57 billion company-wide and over $25 billion in the United States in 2006 (S&P). The main target customer for McDonald's includes parents with young children, young children, business customers, and teenagers. Perhaps the most obvious marketing for McDonald's is its' marketing towards children and the parents of young children. Ronald McDonald was first introduced in 1963 and marked the beginning of their focus on young children as a critical part of their ongoing business. Parents like to visit McDonald's because it is a treat for the kids, and the kids enjoy the cartoon like atmosphere. McDonald's also targets business customers as a part of their core business. Business customers may stop during the workday and can count on fast service, and consistently good food. Another major target of McDonald's marketing is to teens. Teens find the value menu especially appealing and McDonald's markets their restaurants as a cool place to meet with their friends and to work (The Times 100). The menu at McDonald's typically consists of hamburgers, chicken sandwiches, salads, drinks, shakes, and a recent influx of healthier alternatives. McDonald's also is widely known for their breakfast menu, which consists of sandwiches, pancakes, French toast, hash browns, and breakfast drinks. Since McDonald's appeals to such a wide audience, it must constantly re-evaluate its menu depending on feedback and market research. McDonald's expends considerable resources to update its menu and introduce new products in order to be more in tune with its target audience (The Times 100). McDonald's also focuses on the perception of value within it line of products and therefore takes care to price its menu items accordingly. Different products are priced differently depending on which target audience those items appeal to most. An extensive value menu is an essential part of any fast-food menu in recent years. The prices and products within the value menu can prove to be areas that will make or break a fast-food companies' year depending on the competitions value menus.
The McDonalds Company has come to the limelight as one of the fast foods outlet causing health problems to the young people. The youngsters have taken the matter to the judiciary to contest for justice. They have also engaged the media which has publicized the company in that respect. Nonetheless, it is not McDonalds Company alone. The writer confesses that he once dealt in that venture and is remorseful about the woes bedeviling McDonalds.
McDonalds is the biggest toy company in the world. With an average of 1.2 billion happy meals sold each year the amount of toys produced keeps them at the top of the toy company list. One out of every three toys sold to a child in the country is from a fast food restaurant. In addition, kids of older ages have become victims of fast food restaurants in school. One out of every five public schools in the country sells fast food from a brand name, but do not know where it comes from. The contribution of youth has not only skyrocketed fast food businesses but has done so without them knowing.
Richard and Maurice McDonald founded McDonalds in 1940. It was originally opened as a barbeque restaurant, but later converted into a hamburger stand. McDonalds’ are found in over 119 countries, serving about 68 million costumers a day, at 35,000 different locations. 75 years later, it is worth over 98 billion dollars. McDonalds has always significantly relied on advertising to appeal to their consumers. They use all different types of advertising: billboards, TV, papers, social media, and many others. Appealing to their costumers is what makes them so successfully. Although it is known to be unhealthy, they find a way to make their products look pleasing. In this commercial they use well-known people to show of their product, using logos, pathos, and ethos.
McDonald’s is always looking for new ways to branch out their business to regular consumers. Currently, McDonald’s is testing out an all-day breakfast menu for customers eat from to give more of a variety. From a report on the Chicago Tribune, Samantha Bomkamp reported that McDonald’s is having a tough time working things out in the kitchen, but the sales of breakfast items has helped bring in more revenue to McDonald’s. Bomkamp reported that Egg McMuffins have seen a double digit increase among the new change up at McDonald’s. The increase with Egg McMuffins has made the prediction that on average, “All-day breakfast will drive established-store sales by about 1.5 percent in the current quarter, and add about 1 percent in sales over the next 12 months” (Bomkamp). The sales of food have seen an up-down view for revenue, during the first and second quarter McDonald’s has seen a narrow decline among sales. With the new idea of breakfast in place, McDonald’s is expected to have a better quarter for this upcoming record among sales. As far as selling their products, McDonald’s has used the idea to attract the correct media outlets. For example, Nickelodeon and other children’s television channels are highly influenced by McDonald’s and their happy meals. Happy meals and happy meal toys have made McDonald’s an attracting site for many children because of what they bring to the
The corporate mend set is that the employees are the face of the brand and that is why they invest in their employees by providing training and education from the beginning. In 2015 they announced a new employee benefit package that increases wages and provides for paid time-off for eligible employees; they are also offering college tuition assistance.
From a study completed by Chicago-based Research International USA completed a study called “Fast Food Nation 2008. The panel consisted of 1,000 respondents of ages 16-65 who provided their inputs with an online survey which was conducted between March 13 through 2008. Which was based on results on fast food restaurants like McDonald’s, Burger King, and Wendy’s are gaining popularity even through the economic hardship and recession. Marketing strategy has become more of influence on kids and young American’s. As population grows and the demand increases of fast food restaurants are expanding their stores to capturing more consumers. Fast food chains are also willing to change their menus to continue to gain and retain repeating customers. With each generation that passes, brings fast food chains into more homes and continues impacting lives.
OPPORTUNITIES: McDonalds has many opportunities to change its look, menu, and customer service. McDonald’s started building newer building incorporating the arch, along with more modern furnishings. The menu has changed by adding more breakfast items and introducing the McCafe in certain areas.
A franchisee, an affiliate, or the corporation operates a McDonald’s restaurant. Thus, McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees or sales in company-operated restaurants. According to Yahoo Finance report, McDonald's Corporation had annual revenues of $27.5 billion, and profits of $5.5 billion (McDonald’s 2014). McDonald’s primarily sells hamburgers, cheeseburgers, chicken snacks, french fries, breakfast items, soft drinks, milkshakes, and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies, and fruit. Their food caters to all age groups, and they have a special menu known as “happy meal” that is targeting children.
According to businessinsider McDonalds spends 963 million on Advertisements. That’s a lot of money on Advertisements alone plus cost of other necessities. The target market for McDonalds is simple, the target market is everyone. That’s a key part of their success, no one has a reason not to go. Cheap food on the go is for everyone at anytime, therefor who wouldn’t go there? McDonalds targets kids, adults, morning workers and late night partyers. "McDonald 's aims to offer a friendly, fun environment for everyone to enjoy. We seek to appeal to a wide range of people, from families who love our Happy Meal, to workers grabbing breakfast on-the-go or eating in to enjoy our freshly ground coffee and free WiFi."(Who) McDonalds can now appeal to all audiences and get a better chance of getting customers to come
How should McDonald’s respond when ads promoting healthy lifestyles featuring Ronald McDonald are equated with Joe Camel and cigarette ads? Should McDonald’s eliminate Ronald McDonald in its ads?
McDonalds restaurants are very much embraced by Americans and seen as part of their cultural identity. McDonalds symbolizes the youthful energy, ingenuity, and modern efficiency of America. They have become immensely popular since their opening in 1940 in San Bernardino, California, the popular stop with the big bright yellow M sign that almost everyone can recognize at first sight. As the popularity of McDonalds grows, it becomes indirectly a national identity for America and a natural part to the American culture. It would not be strange to see someone hold a McDonalds meal in their hand on their way to work or anywhere. Every day in many cities and towns all across North America, and indeed the world, people line up for McDonald’s meals and burgers as if it were groceries
McDonalds provide high quality products, such as burgers, fries, drinks, muffins, etc, which are safe and reliable that it does what it is supposed to do, but not only does the quality of the products matter, the good value for money affects the business. E.g. buy one extra value meal and get one free with a food voucher that represents the offer only. They ensure that a high standard of the product is carried out at all times and they try to compete very competitively with other fast food businesses with their good value for money. Also a customer would know if the product is good value for money by checking in another food outlet like KFC for their services and products.
McDonalds objectives are to reverse the decline of sales, to continue staying ahead of the competition in the fast food industry and to find new strategies that would help the restaurant successfully compete in the a fiercely competitive market.
McDonalds is a strong company that has been around a long time and is ingrained into the memories of many people. They have indisputably strong brand recognition and loyalty. However, it may be time for McDonalds to undergo a makeover, especially in the areas of quality and their link to health concerns. It is pretty clear that McDonalds isn’t going bankrupt anytime soon. McDonalds has the ability to do good things for the world if they exchange some of their money saving ways more socially responsible practices.
Advertising is mainly targeted at children – children may be a large part of McDonalds’ target market, but the advertisements of the past have solely been targeting children. This is not an effective strategy, as the rest of the target market has not been targeted. Multiple ads that target all groups would solve this